|Bid||111.93 x 800|
|Ask||112.03 x 3100|
|Day's Range||111.82 - 111.98|
|52 Week Range||107.53 - 113.22|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.90|
|Expense Ratio (net)||0.19%|
What Are Markets Expecting from Fed’s Policy Meeting?(Continued from Prior Part)Fed’s inflation targetThe Federal Reserve’s two main objectives are stabilizing prices and maximizing employment. The Fed’s inflation target has been 2% for a
In an effort to protect portfolios against inflation, investors frequently turn to TIPS, or Treasury Inflation Protected Securities. These specialty Treasury bonds function by carrying an embedded link ...
Buffett versus Dalio on Gold: Whose Advice Should You Take?(Continued from Prior Part)Fed to let inflation overshoot target? The Federal Reserve has two main objectives: price stability and maximizing employment. Its inflation objective has been 2%
Buffett versus Dalio on Gold: Whose Advice Should You Take?(Continued from Prior Part)Buffett and Dalio on stock advice When it comes to investing in stocks, Berkshire Hathway’s (BRK.A) chair, Warren Buffett, and Bridgewater’s founder, Ray Dalio,
BAML Survey: Fund Managers Aren't Optimistic about Recent Rally(Continued from Prior Part)Bearish despite rally As we saw in the previous part of this series, fund managers are rotating out of equities into bonds and cash. This typically bearish
January’s Jobs Report: Analysts' Expectations(Continued from Prior Part)Fed watching jobs report closely Fed policymakers are watching the job data closely. The data give the Fed insight as to whether the US economy (SPY) (IVV) is strong enough to
January’s Jobs Report: Analysts' Expectations(Continued from Prior Part)Wage growth in JanuaryWage growth will likely be the most closely watched component of the US (VOO) jobs report. While the other components of the jobs report have shown a
Each day, Benzinga takes a look back at a notable market-related moment that happened on this date. What Happened? On this day in 1997, the U.S. Treasury introduced the first Treasury Inflation-Protected ...
Fed policymakers are watching job data closely, as the data gives the Fed insight as to whether the US economy (SPY) (IVV) is strong enough to withstand interest rate hikes. The Fed raised interest rates four times last year and signaled two more hikes in 2019, which is in contrast to the market’s expectation of no hike. The Fed has remained very positive on the tight labor market and has maintained that increasing rates should keep inflation in check.
Wage growth will likely be the most closely watched component of the US (VOO) jobs report. While the other components of the jobs report have shown a firm labor market, wage growth has been a missing piece for a while. While wage growth had disappointed market participants for the last few months, November’s wage growth was more or less in-line with expectations.
A major factor weighing on gold prices this year was the Fed’s tightening cycle. Since the Fed started the current rate hike (BND) cycle in December 2015, it has hiked rates nine times, with the latest hike in December. If inflation (TIP) remains under control in 2019, the Fed is not expected to move much.
Another concerning statistic that came to light during the Bank of America Merrill Lynch’s Fund Manager Survey was that investors made the largest ever one-month rotation into bonds (BND). As reported by CNBC, the survey said, “Investors are approaching extreme bearishness…This month’s survey [found] the biggest ever one-month rotation into the asset class.” The bond allocations rose 23 percentage points to net 35% underweight, the highest allocation to bonds since the Brexit vote in June 2016. The allocation to bonds also rose amid a drop in inflation expectations.
According to CNBC, Goldman Sachs (GS) analyst David Kostin released a research note on December 14, in which he said, “Investors should increase their defensiveness given our forecast for heightened risk and fat tails.” The bank’s conviction for the markets next year is mixed and the firm advises clients to protect themselves by owning “high quality” stocks. GS also believes that a lot of the movements in the markets in 2019 will depend on investor perception of the longevity of the current economic expansion. To be in a late cycle of economic expansion typically means growth slowing down and margins contracting, accompanied by higher inflation (TIP) and volatility (VIX).
Could Market Risks Bring Investors Back to Gold in 2019? The Federal Reserve Committee plans to meet for the last time in 2018 on December 18–19. The committee is widely expected to raise interest rates (TLT) by 25 basis points, marking the fourth hike this year.
The US jobs report for November was released today. The job additions came in at 155,000 as compared to consensus expectations of 198,000. While job additions in manufacturing remained strong at 27,000, construction net adds declined to 5,000.
Fed policymakers are watching job data closely, as it gives them insight as to whether the US economy (SPY) (IVV) is strong enough to withstand interest rates hikes. The Fed has already raised interest rates three times this year. The Fed is expecting one more hike in December.
Wage growth will likely be the most closely watched component of the US (VOO) jobs report. The metric has long been considered a missing piece of the otherwise strong labor market. While wage growth had disappointed market participants for the last few months, October’s wage growth was not disappointing.
The answer depends on our understanding of Fed Chairman Jerome Powell’s comments. Now, some may argue that since Powell said “just below” neutral in his prepared remarks, he was trying to give a dovish message to the markets. On the other hand, what Powell said yesterday and what he said at the beginning of October may not be that different.
Could Gold Be the Best Bet amid Increased Economic Uncertainty? Bank of America (or BofA) analysts contend that gold prices (GLD) should surge over the next year. The firm stated that higher real US interest rates, a strong US dollar (UUP), and equity market volatility have kept a lid on gold prices year-to-date.
Wage growth will likely be the most closely watched component of the US (VOO) jobs report. In September, wage growth was in-line with the market expectations at 2.8% year-over-year. Economists expect wage growth momentum to continue as the unemployment rate remains low and job additions remain buoyant.
Since equities have slumped in October, investors are reassessing the price they should be paying for the forward earnings. A stock is expensive or cheap only relative to the future earnings growth potential. Since investors are concerned about the future earnings growth (SPY) in 2019, valuations have also started to weigh on investors’ minds. Investors are realizing that the interest rate environment has shifted from being benign to reflecting tighter liquidity. Equities’ valuations are at a level where a small spark is enough to spook investors.
The US consumer price index (or CPI) for September was released today at 8:30 AM EST. The inflation numbers were weaker-than-expected, with the CPI rising just 0.1% sequentially compared to 0.2% expected by economists. In the 12 months through the end of September, the CPI rose 2.3%, which was lower than a 2.7% rise in August.
The Dow Jones Industrial Average Index (DIA) tumbled more than 800 points yesterday as Treasury yields (TLT) (AGG) continued their upward march. Rising bond yields and signs of firming inflation have spooked investors. Investors worry that because the era of near-zero rates has ended, companies’ margins might get squeezed.
For the last few days, the bond markets have seen sell-offs due to stronger-than-expected economic data and hawkish comments from the Federal Reserve. On October 3, Fed chair Jerome Powell said, “We may go past neutral, but we’re a long way from neutral at this point, probably.” These comments likely mean that more rate hikes are ahead. Higher yields are usually negative for equities because companies’ borrowing costs increase as the risk-free rate goes up. Higher rates might deter some investment and increase the cost of borrowing, which could impact companies’ earnings and stock prices.